Posted
by
kdawsonon Friday December 10, 2010 @11:23AM
from the sleeping-under-the-world's-largest-bridge dept.

ChiefMonkeyGrinder writes "Yesterday the biggest software patent troll of all finally woke from its slumbers: Intellectual Ventures filed patent infringement complaints in the US District Court of Delaware against companies in the software security, DRAM and Flash memory, and field-programmable gate array industries. Intellectual Ventures was co-founded by Microsoft's former CTO Nathan Myhrvold, with others from Intel and a Seattle-based law firm." We discussed IV's potential for patent trollery last spring.

Good, I think. Hopefully this will finally cause big companies to fight to get rid of software patents and patent troll companies as a whole.

Actually, the response has not been to rid the world of software patents as you so hoped and the threat of Intellectual Ventures has long been affecting companies. From the article:

The threat posed by Intellectual Ventures helped prompt the rise of firms like RPX Corp. It is paid by companies to buy up potentially threatening patents; the companies receive licenses to those patents, and RPX pledges never to sue over them.

Think about that for a second. The system for software patents is so screwed up and backwards that it's cheaper to pay someone to buy up a patent and promise to never sue over it than it is for you to build a patent war chest and wait for the big one to hit. It's like patent insurance. Easily the most interesting thing in the article to me. Unfortunately this shows tolerance and a way to move forward.

My biggest gripe about patents is that they're kind of like legal blackmail. "Pay me money or I'll ruin your company in a large number of frivolous lawsuits." Patents were originally intended to protect inventors, but companies like IV have provided an evil twist.

The article states that Intel is one of the investors of Intellectual Ventures. The article also says that one of the lawsuits was filed against McAfee, which Intel recently bought. So in this case, Intel is hiring someone else to sue itself - it would be much easier to hold an employee venting day if that's all they wanted to do.

I work part-time at Intellectual Ventures Labs, which enables me to get out of the house and exercise the nerdy predilections that I used to exercise at Blue Origin. This is a sort of all-purpose science lab and thing-making facility where new inventions are developed.

Man, I hate that a company can exist just to own patents and sue people.

Under the current patent system, this company type is likely to be the most profitable. By not actually utilising any patents, they are free from any claims of patent infringement. This means that all of those companies which have built up huge patent war chests with the aim of a "mutually assured destruction" if they are ever sued suddenly become vulnerable. There is no "patent war" defense against a company that doesn't make anything. If you don't make anything, you can't be countersued. From a business perspective it's an awesome idea. If Nokia were to set up an independent legal entity and assign ownership of their patents to that entity, that legal entity could then sue Apple without any fear of being countersued. Apple could do the same. I'm surprised we haven't seen any large companies doing this earlier, but if IV is successful, I bet we'll see a lot more of this company type in the future.

Unfortunately people have been doing this ceaselessly for the last decade+. The only thing that has accomplished is cause the USPTO to get significantly sloppier in their work. The result of which is simply an ever growing body of patents with overly broad terms, little regard for prior art, etc. In short, it has only made the trolls stronger and more abundant.

With respect to goods/service producing companies, patents are no longer about protecting R&D investments. Rather it's about ensuring a defense using the M.A.D. doctrine is in place to safeguard their future ability to conduct business. Unfortunately, M.A.D. cannot be established against a patent holding corporation such as I.V. since no one has yet figured out how to patent aspects of the patenting process. These trolls, and I would assert patents in general, are one of the biggest hindrances to the U.S. economy. This is putting us at a significant competitive disadvantage to the rest of the world and it's only going to get worse.